GAO-15-102, Human Trafficking: Oversight of …

1 Human trafficking Oversight of Contractors Use of Foreign Workers in High-Risk Environments Needs to Be Strengthened Report to Congressional Committees November 2014 GAO-15-102 United States Government Accountability Office United States Government Accountability Office Highlights of GAO-15-102, a report to congressional committees November 2014 Human trafficking Oversight of Contractors Use of Foreign Workers in High-Risk Environments Needs to Be Strengthened Why GAO Did This Study Since the 1990s, there have been allegations of abuse of foreign workers on government contracts overseas, including allegations of TIP. In 2002, the United States adopted a zero tolerance policy on TIP regarding government employees and contractors abroad and began requiring the inclusion of this policy in all contracts in 2007.

2 Such policy is important because the government relies on contractors that employ foreign workers in countries where, according to State, they may be vulnerable to abuse. GAO was mandated to report on the use of foreign workers. This report examines (1) policies and guidance governing the recruitment of foreign workers and the fees these workers may pay to secure work on government contracts overseas and (2) agencies monitoring of contractor efforts to combat TIP. GAO reviewed a nongeneralizable sample of 11 contracts awarded by DOD, State, and USAID, composing nearly one-third of all reported foreign workers on contracts awarded by these agencies at the end of fiscal year 2013. GAO interviewed agency officials and contractors about labor practices and Oversight activities on these contracts.

3 What GAO Recommends GAO recommends that agencies (1) develop a more precise definition of recruitment fees and (2) ensure that contract monitoring specifically includes TIP. DOD concurred with the first recommendation, while State and USAID noted that forthcoming regulations would prohibit all recruitment fees. Agencies concurred with the second recommendation. What GAO Found Current policies and guidance governing the payment of recruitment fees by foreign workers on certain government contracts do not provide clear instructions to agencies or contractors regarding the components or amounts of permissible fees related to recruitment. GAO found that some foreign workers individuals who are not citizens of the United States or the host country had reported paying for their jobs.

4 Such recruitment fees can lead to various abuses related to trafficking in persons (TIP), such as debt bondage. For example, on the contract employing the largest number of foreign workers in its sample, GAO found that more than 1,900 foreign workers reported paying fees for their jobs, including to recruitment agencies used by a subcontractor. According to the subcontractor, these fees were likely paid to a recruiter who assisted foreign workers with transportation to and housing in Dubai before they were hired to work on the contract in Afghanistan (see figure). Some Department of Defense (DOD) contracting officials GAO interviewed said that such fees may be reasonable. DOD, the Department of State (State), and the Agency for International Development (USAID) have developed policy and guidance for certain contracts addressing recruitment fees in different ways.

5 However, these agencies do not specify what components or amounts of recruitment fees are considered permissible, limiting the ability of contracting officers and contractors to implement agency policy and guidance. Sample Recruitment Paths for Foreign Workers on a Government Contract in Afghanistan GAO found that agency monitoring, called for by federal acquisition regulations and agency guidance, did not always include processes to specifically monitor contractor efforts to combat TIP. For 7 of the 11 contracts in GAO s sample, DOD and State had specific monitoring processes to combat TIP. On the 4 remaining contracts, agencies did not specifically monitor for TIP, but rather focused on contractor -provided goods and services, such as building construction.

6 In addition, some DOD and State contracting officials said they were unaware of relevant acquisitions policy and guidance for combating TIP and did not clearly understand their monitoring responsibilities. Both DOD and State have developed additional training to help make contracting officials more aware of their monitoring responsibilities to combat TIP. Without specific efforts to monitor for TIP, agencies ability to implement the zero tolerance policy and detect concerns about TIP is limited. View GAO-15-102. For more information, contact Thomas Melito at (202) 512-9601 or Page i GAO-15-102 Human trafficking Letter 1 Background 5 Current Agency Policy and Guidance on the Payment of Recruitment Fees Do Not Provide Clear Instructions 10 Agencies Monitoring of contractor Labor Practices in Our Sample Varied, but Contractors Labor Practices Reflect Efforts to Combat TIP 20 Conclusions 30 Recommendations for Executive Action 31 Agency Comments and Our Evaluation 31 Appendix I Objectives, Scope.

7 And Methodology 35 Appendix II International Definitions and Indicators of trafficking in Persons 41 Appendix III Migrant Workers in Gulf Countries 42 Appendix IV Federal Acquisition Regulations and Agency Policy and Guidance Related to contractor Recruitment and Labor Practices 45 Appendix V Sample Defense Contract Management Agency Universal Examination Record for Combating trafficking in Persons, May 2011 49 Appendix VI Comments from the Department of Defense 51 Appendix VII Comments from the Department of State 53 Appendix VIII Comments from the Agency for International Development 57 Contents Page ii GAO-15-102 Human trafficking Appendix IX GAO Contact and Staff Acknowledgments 60 Related GAO Products 61 Tables Table 1: GAO Sample of Government Contracts Employing Foreign Workers Overseas 4 Table 2: Migrants in and Tier Placement of Gulf Countries, Afghanistan, and iraq in 2013 10 Table 3: Varying Levels of Specificity in the FAR and Agency Policy on Recruitment Fees 12 Table 4: GAO Sample of Government Contracts Employing Foreign Workers Overseas 37 Table 5.

8 Number of Migrants in Gulf Countries from Each of the Top Five Source Countries in 2013 42 Table 6: Agency Policy and Guidance Related to Recruitment and Labor Practices on Government Contracts 46 Figures Figure 1: Examples of Different Paths Foreign Workers Take from Their Home Countries to Work on a Government Contract Overseas 18 Figure 2: Examples of Subcontractor-Provided Housing for Foreign Workers on a Base Operations Support Services Contract in Qatar 27 Page iii GAO-15-102 Human trafficking Abbreviations CENTCOM Central Command C-JTSCC Central Command-Joint Theater Support Contracting Command DCMA Defense Contract Management Agency DOD Department of Defense FAR Federal Acquisition Regulation ILO International Labour Organization IRIS International Recruitment Integrity System KSCR Kuwait-Specific Contract Requirement SPOT Synchronized Pre-deployment and Operational Tracker State Department of State TIP trafficking in Persons TVPA trafficking Victims Protection Act USAID Agency for

9 International Development This is a work of the government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Page 1 GAO-15-102 Human trafficking 441 G St. Washington, DC 20548 November 18, 2014 Congressional Committees The government relies on contractors to provide services overseas, such as construction, security, and facilities maintenance. In some countries, such as the Gulf countries,1 where the local labor force is small, or in countries such as iraq and Afghanistan, where the employment of local labor poses security risks, these contractors rely on foreign workers individuals who are citizens of neither the United States nor the host country to perform this According to the Commission on Wartime Contracting in iraq and Afghanistan, the government s reliance on local nationals and foreign workers leads to considerable cost savings compared with the employment of military personnel or Many foreign workers come from developing countries such as India, Bangladesh, and the Philippines.

10 Where job opportunities and wages compare poorly with those in destination countries. The disparities in income levels and the methods used to recruit these workers often make them vulnerable to a variety of labor abuses. There have been allegations of abuse of foreign workers on government contracts overseas since at least the 1990s. In 2000, Congress enacted the trafficking Victims Protection Act of 2000 (TVPA) to combat trafficking in persons,4 and in 2002, the United States adopted a zero tolerance policy regarding government employees and contractors engaging in trafficking in persons (TIP) Since then, Congress and the President have taken further steps to address the issue of trafficking in 1 For the purposes of this report, we use the term Gulf countries to refer to the six member states of the Cooperation Council for the Arab States of the Gulf, also known as the Gulf Cooperation Council.